2011-15: Firm-level determinants and impacts of finance-seeking behaviour and outcomes for small and medium-sized enterprises (SMEs) in Australia (Working paper)

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Author(s)
Xiang, Dong
Worthington, Andrew C.
Higgs, Helen
Year published
2011
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This paper uses firm-level data from the Business Longitudinal Database compiled by the Australian Bureau of Statistics to examine finance-seeking behaviour and outcomes by Australian small and medium-sized enterprises (SMEs). By modelling the determinants of SME financing behaviour and outcomes using discrete choice techniques and more than two thousand firm cases, we throw useful light on the firm-level factors involved in both debt and equity financing decisions, the availability or lack of availability of finance, and the impact of these outcomes on future firm behaviour. Our findings indicate that a large number of SME ...
View more >This paper uses firm-level data from the Business Longitudinal Database compiled by the Australian Bureau of Statistics to examine finance-seeking behaviour and outcomes by Australian small and medium-sized enterprises (SMEs). By modelling the determinants of SME financing behaviour and outcomes using discrete choice techniques and more than two thousand firm cases, we throw useful light on the firm-level factors involved in both debt and equity financing decisions, the availability or lack of availability of finance, and the impact of these outcomes on future firm behaviour. Our findings indicate that a large number of SME characteristics, including firm age, size, industry and sales and the declared strategies for operations, profits, growth and exports, significantly affect both finance-seeking behaviour and outcomes. Putting aside any supply-side circumstances, we conclude that Australian SMEs suffer from severe financial constraints and this significantly affects their strategizing and decision-making across a number of areas.
View less >
View more >This paper uses firm-level data from the Business Longitudinal Database compiled by the Australian Bureau of Statistics to examine finance-seeking behaviour and outcomes by Australian small and medium-sized enterprises (SMEs). By modelling the determinants of SME financing behaviour and outcomes using discrete choice techniques and more than two thousand firm cases, we throw useful light on the firm-level factors involved in both debt and equity financing decisions, the availability or lack of availability of finance, and the impact of these outcomes on future firm behaviour. Our findings indicate that a large number of SME characteristics, including firm age, size, industry and sales and the declared strategies for operations, profits, growth and exports, significantly affect both finance-seeking behaviour and outcomes. Putting aside any supply-side circumstances, we conclude that Australian SMEs suffer from severe financial constraints and this significantly affects their strategizing and decision-making across a number of areas.
View less >
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Copyright © 2010 by author(s). No part of this paper may be reproduced in any form, or stored in a retrieval system, without prior permission of the author(s).
Note
Finance
Subject
C25 - Single Equation Models; Single Variables: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
L21 - Business Objectives of the Firm
G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure
Small and medium-sized enterprises
Financing decisions
Debt and equity
Discouraged borrowers